08 May LTV: Important factor for your app you can’t afford to ignore
A successful app costs many factors and as an app developer, you need to leverage each matrics affecting the app success to lead it at the best.
Generally, app success counted on a number of installs and number of active users. However, the wait is it clearly indicates the app value? no, you will need LTV- lifetime value of users. Let’s see what is LTV and how you can measure & use for app development.
What is – LTV exactly?
LTV – user lifetime value is the total amount of earning you will get from the lifetime of a user. Starting from user install the app to user uninstall it – the time span is counted as user lifetime and revenue you generate from that period is called LTV.
As per your monetization channel, it includes all the money spent by users to any in-app purchases and or ad clicks.
How to calculate LTV?
It is slightly different from average revenue per user. There are 3 factors that affect LTV.
After downloading of your app, how many users are using your app and engaging after a week or more time.
The channel you have used for revenue generation from users. It can be in-app purchase or ad-impressions.
The number of new users brings by existing users with sharing app directly or indirectly.
How can LTV help your app marketing efforts?
LTV will tell you the health of app. you will get a better picture how it is performing in the market.
You will get to know how much business each customer bringing to you and it is going as the plan or not.
It will help you with..
1. Sharpen your customer acquisition and retention strategy
People spend too many resources on customer acquisition forget user retention and user experience. If you work only to get new installs, you will end up getting less long-term high-value users with a user base of short span.
If you count LTV of your app, you will get a clearer idea of the current situation of the system and you can focus accordingly to the user retention.
2. Optimized monetization
Not each audience is ready for in-app purchase or some don’t want ads. Based on your user’s behavior and LTV you can select optimized monetization that earns better revenue with customer satisfaction.
for a better revenue model, you will need users to earn you content earning. Hence, as per audience behavior, you should try different ad serving/ monetizing for your app.
How to increase LTV:
High the LTV, better the app value and revenue of the whole system. The only question here is then how to increase the LTV? It is really simple. You need to find what yours not liking and what they love in your app. just improve the features and user will stay. You can increase the user engagement with interesting content and features. Provide a great experience to users and you will create a loyal user base that will push the LTV.
Give attractive start. The first impression is the last. Provide smooth user experience with unique UI and clear navigations.
You can get new users from your existing users with solid referral policy. Run refer campaigns and give little reward each time user bring new app user. This will create a constant channel of acquiring new users.